Silver Standard Resources Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Silver Standard Resources Inc. managers to do a situational analysis of the organization . It is a useful technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Silver Standard Resources Inc. is facing in its current business environment.

The Silver Standard Resources Inc. is one of the leading firms in its industry. Silver Standard Resources Inc. maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the firm such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Silver Standard Resources Inc. to develop four types of strategies:

SO (strengths-opportunities) Strategies

WO (weaknesses-opportunities) Strategies

ST (strengths-threats) Strategies

WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Silver Standard Resources Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Silver Standard Resources Inc. SWOT Analysis

As one of the leading companies in its industry, Silver Standard Resources Inc. has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Silver Standard Resources Inc. are –

Highly skilled workforce through successful training and learning programs. Silver Standard Resources Inc. is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.

Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

Good Returns on Capital Expenditure – Silver Standard Resources Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Superb Performance in New Markets – Silver Standard Resources Inc. has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.

Highly successful at Go To Market strategies for its products.

Strong Free Cash Flow – Silver Standard Resources Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.

Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.

High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.

Weakness are the areas where Silver Standard Resources Inc. can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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Investment in Research and Development is below the fastest growing players in the industry. Even though Silver Standard Resources Inc. is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.

Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Silver Standard Resources Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

High attrition rate in work force – compare to other organizations in the industry Silver Standard Resources Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.

Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.

Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Silver Standard Resources Inc.

Government green drive also opens an opportunity for procurement of Silver Standard Resources Inc. products by the state as well as federal government contractors.

Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Silver Standard Resources Inc.’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.

Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Silver Standard Resources Inc. in other product categories.

New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Silver Standard Resources Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.

New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Silver Standard Resources Inc. to drive home its advantage in new technology and gain market share in the new product category.

The new technology provides an opportunity to Silver Standard Resources Inc. to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.

Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Silver Standard Resources Inc.

Limitations of SWOT Analysis for Silver Standard Resources Inc.

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the
major limitations of SWOT analysis
. For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.

SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.

The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Silver Standard Resources Inc.

SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.

SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Silver Standard Resources Inc.

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Silver Standard Resources Inc. managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.